Rich Or Poor: Who Gives The Most?

firoz patel charity

In 2015, Americans gave more than $373 billion to 1.5 million public charities, and of this amount, 71 percent had come from individual donors making direct gifts.

Who are the donors?

The Atlantic reports that in 2011, the wealthiest Americans who earn at the top 20% contributed 1.3 percent of their income, while those at the bottom 20 percent contributed 3.2 percent of their income. So it’s the poor people who give the most—not in amount, but in relation to their earnings.

The wealthy tend to support colleges and universities, arts organizations and museums, while the poor donate to religious organizations and social service charities., And the rich people who lived in rich neighborhoods gave less than the wealthy who lived in socioeconomically diverse settings. These findings support the notion that those who are closest to the problems and the people who need to be served are most empathic and motivated to donate – if not money, their time and energies. It is this fact that throws light on a philanthropic organization that is having impact in communities and countries around the world.

The Pollination Project (TPP) is an organization that awards seed money of $1000 to individuals and groups who have an idea or dream of meeting a need in those around them or of developing something they value and want to support and/or preserve. From January 1, 2013 on, TPP has awarded $1000 each day of the 365 days in a year.

The TPP fund recipients provide a rich, eye-opening pool of narrations on how that small amount catapulted them into projects, several who have since formed organizations that are winning awards from larger funding entities. There is an amazing variety of projects ranging from community development and environmental protection, to education, arts, music, dance, to protection of endangered animals, to children and adults with special needs. Poverty is alleviated, food provided, health improved, at risk youth saved, the indigenous empowered through income generation projects and prisoners assisted with education.

A number of awardees report that the grant had a life-changing effect in their lives. Grant receivers mention most often that they were empowered and motivated by the grant — that this organization believed in them and thought their ideas worthwhile. The grant and publicity through the Huffington Post TPP blog provided legitimacy and international publicity, and brought local and national support.

TPP does more than give out $1000 grants. It guides the applicant through the application process, which is to think through, organize and explain the project. Each application gets a personal touch and feedback, whether funded or not. The encouragement and support by TPP staff magnifies the effect of the monetary support it provides. As one recipient said, “It is not easy to take a creative idea and grow it into a sustainable organization. When a group like the Pollination Project believes in your vision, it is like fuel to the soul!” Other statements by recipients: “You have helped restore my faith that there are really systems of support that really work to help everyday people, who want to make extraordinary change!” “…it helped restore my hope and faith in what I am doing. It has provided me with the drive and fortitude to carry on at a time when I felt like all was lost.” ” You have made a vision a reality.”

TPP was founded by Ariel Nessel, a real estate developer, and his sister in law, Stephanie Klempner. They are joined by other Board members and staff, each of whom bring a unique background and experience, but all of whom share a passion for what they are doing. It is Ariel’s belief that “We don’t need more Mahatma Gandhi’s and Martin Luther Kings in the world. What we need is individuals–large amounts of people who are making small changes in and around their communities. I’ve seen that …individuals have that capability.”

Know Your Philanthropy

DonateThere are several popular forms of philanthropy that circulate around places such as schools and churches. Canned food drives and clothing drives, for example, are typically publicized by said places as ways to give. When natural disaster hits a certain region, clothing drives are generally the first response. However, while taking the time to give is admirable, not to mention it has numerous health benefits, many people donate without doing the proper research. When giving anything to a cause or an organization, philanthropists must make sure they know the precise needs of the group they are giving to.

Think about it: you have to make sure you are giving people what they truly need in order to make a difference. Unfortunately, popular donation ‘drives’ usually do not take this into account. For example, having canned food drives for Food Pantries are not the best allocation of resources. Food pantries have the ability to buy a large amount of edible goods in bulk for a cheaper, wholesale price. Therefore, the money that is spent buying cans for a food drive, if simply given to a food pantry, could stretch a lot farther.

Knowing what to give at what time is doubly difficult when facing the aftermath of a natural disaster. Usually, when a devastated region is attempting to recover, its needs change on a weekly, or even daily, basis. There have been instances in the past of too many clothes being donated after a natural disaster, such as in 2004, after India was hit by a tsunami. The more clothing sent in, the more useless clothing donations became. It got to a point where there were piles of clothing lying at the sides of roads. Resources had to be used to clean up the clothing as well as the effects of the natural disaster, which stunted overall recovery efforts.

This may make it seem as if giving money is the only way to truly make a difference, especially in the wake of a disaster, but even this form of philanthropy has its own caveats. When donating any sum of money to an organization, you must delve into the organization to ensure it will make the most use out of your money. Of course, searching for fraudulent activity in a charity is a no-brainer. However, you must also discern if the charity’s program is effective, and has made a difference in the past.

This news comes as something of a surprise to all philanthropists, myself included. Things like food drives and clothing drives bring communities together in support of a specific cause, and I worry that stopping such programs will make people feel less fulfilled when giving. Therefore, we must find a way to maximize the effectiveness of the money of philanthropists, while at the same time providing them with the community that comes with drives.

Creating a Corporate Culture of Caring

Firoz Patel Corporate GivingIt’s no secret that new and old companies alike are starting to invest in opportunities that allow the companies and their employees to give back or help charitable causes. The numbers don’t lie, giving back is important to professionals – particularly to younger members of the workforce, and a common value among many.

In constructing a company’s culture, knowledge of the employees is a key point in designing and implementing a company culture that allows its employees to flourish. Knowing that philanthropy and giving back is important to the employees is a leg up for a company’s culture architects, but in truth this information is only half  of the battle.

Companies large and small can struggle with integrating this information into tangible manifestations within the organization. However there are some steps to keep in mind when creating a culture of caring (and giving) within the context of a company.

Start Early

While this does not apply if we are talking about an established business, if your company is in the process of development, make sure to incorporate this into the central tenets of your company’s mission statement. Whether this means devoting a certain amount of the company’s equity to a charitable cause, or establishing clearly defined programming and opportunities around a philanthropic purpose, incorporate this into the company’s mission ASAP. This means that employees will understand philanthropy as a core value of the company whether it’s the first hire or the hundredth.

Don’t Just Talk the Talk

While it’s a great idea to incorporate this sort of language and focus into the company’s mission statement and core values, it’s more important to show this sort of attitude. It’s great to have this written down somewhere, but the only thing that will give these words meaning is the corresponding action.

Care to Scale:

Be realistic about what resources your company is able to allocate to a charitable cause. Don’t overpromise, only to find yourself and your employees unable to deliver on this promise. Whether this is a dollar amount, or the manpower delivered by your team, make sure that your team is able to follow through. This means that you need to take stock from the beginning. Set charitable goals that are reasonable within the framework of your company. Furthermore, if possible, make sure that you are choosing a cause that works with the mission, focus or skills of your company and its talented employees. It’s always a great idea to share what your company is great at, with those who can truly benefit from that expertise.

While there are more ways to integrate giving into the core of a company, the most important thing is to take a step back and evaluate where your company is, where you want it to go and how integrating charity as a core value can be an asset to both the recipients of the charity and to the company itself.

 

How to Give : Sean Parker’s Tips for Hackers

firoz patel“It’s important for hackers to embrace the values that made them successful in the first place: skepticism of the establishment and a desire to provoke or upend it. The hackers who are entering the global elite should embrace charitable giving as its own reward, not as a means of acceptance into the very social systems they have played a role in demolishing.”

Sean Parker is known as many things. To some he is the unyielding kid behind the notorious Napster, to others, he is the controversial founding president of Facebook as famously portrayed by Justin Timberlake in the Social Network. Additionally,Sean Parker serves as a board member of Spotify and is the chairman of the newly formed philanthropic endeavor, the Parker Foundation.

In a recent article featured in the Wall Street Journal, Sean Parker outlined the challenges of wielding so much power and financial clout for emerging tech barons. Sean describes this “new global elite” as a class comprised of true innovators and pioneers in telecommunications, Internet services, personal computing and other tech-based niches.  He reflects on the fact that over the past few decades, the grand shift in demand for technology services has in turn restructured the division of wealth among, well, the wealthiest.

Parker mentions that this class of people has been described as “ technologists, engineers and even geeks, but they all have one thing in common: They are hackers”.

He then goes on to describe the common characteristics of this hacker class. Parker claims Hackers share a skepticism of the establishment, a demand for transparency, an inborn ability to find weak spots in systems and a passion for exploiting the weaknesses of a system through the creation of elegant solutions. Most importantly, hackers maintain a steadfast belief in data as an integral part of problem solving.

After Mr. Parker seemingly concludes his description of the “typical hacker” as an outsider, he goes on to describe the driving force of idealism as a propellent back into the more traditional realm of philanthropy.

Parker admits, that while this desire to do good ushers these new radicals into a well-established milieu, the hacker elite is more interested in evaluating their own impact as opposed to partaking in the pageantry that can accompany such generous giving. In this article, Sean Parker provides a call to action for those looking to contribute large sums of money to generous causes.

Parker suggests that those looking to create a foundation or contribute to an endowment:

Give Early

Parker alludes to an extremely important difference in how you look at managing the capital behind a business vs the mindset behind managing the money in a foundation. Business mogul Warren Buffett recently shared this same sentiment at the Forbes philanthropy summit.  Parker suggests that the money spent through a foundation or a charitable cause should be spent now. You’re not trying to build an extensive reservoir of money to be held onto in perpetuity. Instead  you want the assets to go to issues we face today with the hope that this will positively impact both the present and the future.

Stay Small

Another important tips that Parker offers, particularly to those looking to start a foundation is the importance of staying small. Although well-established foundations  and government-run agencies may have some advantages in the form of larger endowments or certain tax breaks respectively, smaller foundations bear one huge advantage. And that is agility. By keeping  a foundation small, this organization remains unencumbered by decades of red tape.  A small and new foundation has the mobility to contribute and react in real time, whereas older or government bound organizations may not.

Although Mr. Parker was directly addressing the specifics of small, but growing class of tech-elites, the overarching sentiment can still be applied to people in other fields trying to figure out how to approach the broad concept of “giving back”.